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All right, everyone, welcome back to another episode of Bell Curve. Before we jump in, quick disclaimer, the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with. Nothing in the episode is construed or relied upon as financial, technical, tax, legal, or other advice. You know the deal. Now let's jump into the episode.

Welcome back to another episode of Bell Curve. You got the roundup. You got myself, Vance, and Michael, number 1. No, Mike, number 2 today. How you guys doing?

What's up? What up?

How we doing? Amazing.

How you guys doing? We're doing

pretty good. It's a quiet day in the crypto ecosystem. Pretty good day.

We are ripping. Narratives are funny, huh?

Everything sounds better when the prices are higher. Yeah,

it's good. I was like, man, a lot of product innovations this week.

Yeah, technology improving rapidly. Technology improving. Yeah. Yeah. We love Ripple, huh?

We love, We love Ripple. Yeah. I kind of forgot about this case.

I mean, I think this is a good example of these cases take years to play out. It's been going on for years, huh? I don't know how much Ripple spent. It's got to be at least in the tens of millions. I wouldn't be surprised if it was hundreds of millions that they spent on this case.

Yeah. Oh my God.

It's coming up on, it's 2 and a half years already. You know they've had every single lawyer that they could possibly find working on this. I think they actually also hired a bunch of people specifically for this case, or internal counsel. I wouldn't be surprised if it's in the 9 figures. Yeah.

So for anyone living under a rock who missed this, basically for the last 2 and a half, 3 years, the SEC has had a lawsuit against Ripple claiming that they issued unregistered securities, which was XRP, their token. And today a judge, I think it was a federal judge, basically came down and said they issued their statement against this and said that There's kind of 2 buckets here. They decided that the institutional sales and like fundraising side of what Ripple's done with XRP, some of that was securities. However, the big news is that the programmatic sale of XRP on exchanges was not a security. That was my takeaway in like, there's a lot more details, but is that, you guys read that the same way?

I think that's roughly the, my conclusions as well. And just to give everyone context, this started what, with Jay Clayton leaving, This was like the last thing that he filed. So this is something that's been going on to Michael's point for a long time.

Yeah. The only other variable I'd say is they also defined that granted summary judgment to the defendants. I think that's exactly how it goes for the executives who are selling as well. So Chris Larson, Brad Garlinghouse seem to be fine with their transactions as well.

Yeah. Yeah. So to get in detail a little more, so SEC versus Ripple in brief, Ripple putting XRP on exchanges for trading and funding their operation with those sales is not an investment contract. Therefore, it's not a security. Ripple paying people in XRP is not an investment contract, therefore not a security.

XRP is not a security in and of itself, even when offered through a securities transaction. That was the good news. The other side of this that wasn't making the big headlines was Ripple selling XRP directly pursuant to contracts was an investment contract and therefore a security. And that's like, I think, OTC deals, direct from treasury type deals. Yeah, those kind of like these basically institutional sales deals.

So yeah, what do you guys make of this?

Positive. I mean, overall, there are a number of different ways that this decision could have happened. It could have been all in favor of Ripple, it could have been all in favor of the SEC. It seems like they've decided to split some of the decisions. And frankly, I think a lot of this does make sense.

Just in some of the initial Twitter perspectives, this isn't necessarily a 1 and done sealed, it's all over perspective. We would expect that there will be some appeal. This doesn't actually clarify a lot of the different elements of what potential new regulation would clarify. So I think this is definitely a huge victory for the crypto industry in general, but I think there's still a lot of work to be done. So I would say the other thing, just as a point of delineation, when you're raising capital and you're selling assets, whether those are securities, commodities, property, whatever, to do so, that contract is considered to be a securities transaction.

And when US investors invest in companies, those companies have to file for what's called Form Ds with the SAC saying that they raised private capital to sell equity in their business or sell whatever in their business. So I think that's probably the logical thread that the judge is taking here. When you're doing direct sales, whether it be OTC or institutional or capital formation, that's where you need to actually go through a securities contract. And that contract itself is an investment contract. Whereas if you're selling these on an exchange, what they call the programmatic selling, where the seller doesn't know who the buyer is, and the buyer doesn't know necessarily that they're buying from Ripple Labs itself.

And the market determines the price through the order book based transaction. That's where it seems that they've taken the stance that those are not securities transactions.

So just

a little bit more color on the difference. Yeah.

Vance, what do you think? You had a nice little

bullish tweet earlier this week. Little bullish tweet? I mean, yeah, like we were talking about, it's just crazy how 1, these things, it can kind of come out of nowhere and just totally change the narrative. And yeah, to some extent, the trajectory of the space as well. I still, like my take on all this is, you know, there still might be appeals, like there still might be all this stuff that's going to happen, but like we just need laws for this stuff.

Like this, even this decision doesn't really make a ton of sense. Like, you know, selling it.

It's a monumental development, but it doesn't work as law. Yeah, it doesn't. Right, it's a great,

you know, like we definitely want, everyone has that sense. All the crypto lawyers are having a field day, just nerd sniping each other on Twitter. But I think, yeah, we just need laws for this stuff. This doesn't feel like a consistent framework that we can apply across an industry that's going to change a lot and grow.

Yeah. What do you guys think?

Go ahead. On that point, great timing. I mean, We have the stable point bill, the market structure draft. There's a lot of stuff that's been moving, and at least as of a couple of weeks ago, there were supposed to be some initial votes internally and discussions internally within the house. And then also the Louis Dealer brand redraft just came out a couple days ago.

So this stuff is also happening in parallel to the discussions and negotiations and drafting of laws. So I think if anything, that's probably the biggest takeaway is that this is just perfect timing for us to go into discussions with the lawmakers themselves.

Yeah. All right. Let's talk about why this actually matters. So do you, I've seen a lot of tweets today that this means that all tokens are not securities. I think that probably is too far.

And I think that's probably too bullish of

a tweet, but that one's a

lot of point entirely.

Okay. Okay. I mean, it does feel like though, um, there's kind of 2 types of tokens that are kind of coming into view here. There's like app tokens and there's infrastructure tokens, at least this is how I'm kind of seeing the world. Infrastructure tokens are, it's becoming more and more clear that they are commodities where the commodity here is basically what an L1 is doing is selling block space And we have no idea how to value this block space.

It's a totally new business model. But the token here is basically represents the commodity that is the block space. And I think a lot of these like L1, maybe L2 tokens will be seen by regulators and policymakers in years to come as a clear commodity, I think the jury's still out on some of these app tokens.

Yeah. I mean, that's why you see everyone launch L2s, right? Or like things that look like infrastructure. They kind of create these weird perverse incentives to ship things where the market is already naturally saturated. And so if you have a DeFi token, if you have some different type of app token, to your point, it's still pretty unclear where things lie.

I would say though that even from this decision, there's nothing that changes or that reinforces that perspective. This is very specific to XRP itself. It's just the facts and circumstances of XRP and the transactions that the Ripple Labs team had. Once again, It's great that this happened and this is definitely a feather in the cap of the crypto industry to move forward with more momentum, but I don't think it has anything to do with any other token.

Yeah, that's

fair. It does, I think, help the Coinbase lawsuit, right? Because if listing XRP on exchanges doesn't make it a security, The SEC's case against Coinbase is kind of toast here. I feel like XRP was probably the easiest coin that the SEC could have used in the Coinbase case, but maybe I'm trying to draw

a line. We have no idea. We're not lawyers, obviously. I mean, reading through the ripple case, it was about as egregious as you probably could have gotten. And yeah, I think my internal expectation was that like, it was like probably

50 50.

Yeah, definitely was not a foregone conclusion, at least for me.

Vance, you had this tweet earlier in the week. So maybe I just let's just zoom out a little bit from from this ripple news. You had this tweet just kind of like zooming out, talking about just bigger narratives, like where you're seeing the industry. Can you just tell us about that tweet and what sparked that?

Yeah. I think it was off for 10 days or something and was working during it, but just was looking at the things that were happening on chain, real world assets, DeFi starting to really kind of pick up and be impressive, stuff that we're seeing on the private side, prior analogies to past cycles, the timing of where the happening is, is a really big factor in each 1 of these things. And in 2021 being 3 years away versus being, you know, less than a year away today, it's a lot different. And so I think, you know, there's definitely a narrative that crypto is failing and that the outlook is not as optimistic, but I've tried to try that perspective on for size. It doesn't really make as much sense if you really consider all of the evidence and facts and things that are being brought on chain.

We've talked about this a lot, but if you have $600 million of real world assets that's growing 30% per month, and there's 15 different companies that are trying to bring this stuff on chain, somebody's going to do this and it's going to work. So yeah, I see that historically tokenization has been a big thesis as well. And the hard part about tokenization historically is that really nothing has been worth bringing on chain. And that was a function of rates being low. So we were bringing on crappy Aspen condos with no 1 to buy the other side, like nothing that would really make a difference.

But now since rates are high, we have this window of the most attractive, most accessible, lowest risk financial instrument being brought on chain. And Asia was a big place for stable coins. I wonder if we could see something similar happening, you know, at some point. You know, someone will figure out this regulatory structure. And I think that would be really positive.

So I think there's a lot to be optimistic for. And the people who I talk to are generally, you know, sidelined in 1 way or the other. And I think that's kind of part of the other side of the story.

What is the folks are sidelined going to this bull market?

I mean, even in the traditional markets, the people that we talk to, especially East Coast folks, this was supposed to be the year of the Stanley Druckenmiller recession. Everyone was all bulled up on, or I get bared up on that idea. And it just hasn't come to pass yet. Not not saying that it won't eventually.

You're saying Saks was wrong?

I mean, everyone was on that train and everyone, you know, in the NASDAQ just had 40 percent up for a SAP, the best I think ever. So that's painful. There is really nothing like just watching something just rip in your face that you want a piece of, but also hate. It's like a religious experience. And so I think a lot of people are going through

that right now. Yeah.

Do you guys see the Patek Philippe NFT loan talking about bringing things on chain? Do you

guys see this this week?

I mean, not until you mentioned that, but like this is, there is, so you send me an telegram, but this is super cool. Like here, I'll describe it.

I'll describe it. If people didn't see it, so basically this week a lender gave a stranger this $35, 000 loan at a 12% APR, and they used a Patek Philippe as collateral here. And the kicker was that this was done completely on chain basically, or with an NFT that got kind of moved into DeFi land. So the details of this is that, all right, so you have a borrower, borrower sent the watch to an escrow company, escrow company then sends the watch back or sends them back an NFT, which represents ownership of the watch. The borrower then listed the NFT on Arcade, accepted the best loan offer, and then the NFT was then transferred to an escrow wallet until the term is up or the borrower repays in full.

And the only way to get the watch back is by burning the NFT. So if the borrower defaults, the lender can claim the watch. Really cool, right? It's obviously early days and like the lender, it's cool for 2 reasons. 1 is the lender doesn't even have to know the borrower's name.

They don't have to know credit history, any of that kind of stuff. They just have to know that they are the rightful owner of the watch, which is kind of what the escrow company and, but, and, and the NFT does here. Um, and obviously kind of for the naysayers who might say, yeah, you can do this in traditional capital markets for anyone who's got, tried to get a loan on a weird, like a kind of an asset like a watch or a piece of art. Like, yeah, you can, you can take a watch to a local pawn shop, but yeah,

you're going to a pawn shop.

Yeah. You go to a pawn shop to do it. Um, where you're getting hosed on the rates. Um, but I mean, 12% is still pretty high, but anytime, if you look at any market in the world, like anytime you tap into global liquidity versus local liquidity, eventually you end up converging on the best rate possible. And so the rates are going to be high in the early days.

But eventually you end up bringing these kind of like long tail of assets on chain. I actually think seeing this, the long chain of assets coming on chain is probably what drives this market instead of bringing something like T-bills on chain.

I mean, T-bills are the biggest category. So those are just going to be the biggest, but NFTs are going to be like if you can actually create like a digital pawn shop, that's super interesting because you know, at a shop you can sell something, but you can also just post it and borrow against it.

I guess here's why I think that the long tail will bring these folks on chain. And then it comes from treasuries is if you look at how all these web 2 platforms develop, like YouTube and Airbnb and Uber and Spotify, they basically gain traction. They don't start by bringing the existing supply of whatever they're selling on the marketplace on, on, on chain or onto the platform. First, they get traction by enabling this kind of long tail of supply that wasn't ever possible and accessible with prior platforms. So like here, let me give an example.

So Spotify first starts with all these like indie musicians that no 1 can listen to. Once they gain traction, then they bring the big labels on onto Spotify. Airbnb, there was no way to access that kind of long tail of like people posting their houses. Once that happens, now the like hotels are posting hotel rooms on Airbnb. Uber, like Uber, same thing.

Etsy, right? Etsy started with this like long tail of like weird merchants, like just little like merchants and craft people. Now big brands are posting on their stuff on Etsy as well. So I think YouTube as well, like bloggers, home video content, only after that was successful Did YouTube get these like sports games are streamed on YouTube and. Traditional TV shows.

Now you can watch on YouTube. And so I think like when you try to tie this back into defy, it seems I'd like Rob Leshner came on the Empire podcast, love what he's doing with Superstate. I do see that Treasuries coming on chain is a big thing, but like the typically platforms get traction and drive adoption when they allow people to access supply that is not possible to access anywhere else. Gets traction, then the big supply comes on board. I could see

that. I could potentially see that happening. I would say the likelihood is probably the reverse for playing out in that the access point that you don't have access to currently is frankly treasuries for stablecoin based treasuries as in like the pools of capital that all of these protocols have raised. And I think that that's going to be the catalyst to drive adoption to tokenize other things. And that's the enablement, that's the new technology.

Because right now, you have to send them to a custodian who mints the NFT. You're not able to wear that Patek Philippe, or you're not able to look at that piece of artwork while you are also borrowing against it. That ability to have utility as well as the financial services applied to that asset, I think is where you take this next. And that's when it becomes really interesting. Frankly, you have to have a digital asset to be able to do that.

So for instance, you have to be able to have a financial contract, security, whatever it is that is represented on chain that's in a digital ecosystem versus a physical item. I haven't come up with a good enough solution to cross that analog digital divide. But we talk about this a lot, whether it's real world assets, Rob Lashner calls them traditional assets. I think the short period of time in the next couple of years while we see interest rates at 4% or 5%, that's going to drive adoption and tokenization of assets in general. And that will drive the enablement of more financial assets that give you the higher yield, that make them more interesting, they're more bespoke.

And so, what we talk about is we think treasury yields will be the driving force here and yet the treasuries with cash sitting idle to invest in it, but then it'll be the tokenization of the long tail that drives consumer adoption, but you have to have more enabling technologies to have that long tail.

How are you guys investing right now? Does this like bullishness change the investment thesis at all or just business as usual?

Business as usual, honestly. I feel like we've just thought through like what are the credible thesis areas for crypto to manifest. And I think there's probably 3 or 4 right now. And a lot of this is just already assumed that stuff like this would happen or like not maybe stuff like the ripple case, but more so just courts pushing back or legislation or regulatory clarity in some way. So yeah, we're always investing for these outcomes.

It doesn't really change anything other than the price? It's just to see.

It is just to see.

I went back and looked at this recently, but I don't know if you've seen this Vance, but our pacing has been consistent every single month this year in terms of new deals that we've done. So I think that's probably the biggest sign that things haven't really changed or slowed or sped up. The 1 major difference to Vance's point is the price and the valuation.

Which is interesting, at least for like the base layers, because like the technology is improving meme is actually true. Because like if you have ETH, which goes up, it's the main asset of collateral and DeFi, which then gets more credit taken out on it, which boosts NFT prices, which boosts confidence. It is this kind of health reinforcing system. And so yeah, it does change some things for some people. You're probably gonna see people throw out even higher targets now.

That will be

the- Some good 100K ETH prices.

And you know as well

as anybody, when people get riled up, it's like the dog chasing its own tail. It's crazy how quickly you can see the impact of like narratives changing on actual things that like drive revenue for companies inside of crypto. So like for us, like 1 of the ways we make money is permissionless and we're having 1 of the biggest ticket sale days that we've ever had from Permissionless. And I think in the last 7 days, it was the biggest Permissionless sales ticket week that we've had since we launched Permissionless. So it's like, it has very quick, which then gives us more money, which then we can hire more people, which then brings more people into the industry.

And it's a, it is this nice cycle.

Tyler Litchenberger I've, I've, I've found people's maximum, you know, narrative cognition level is about a month. Like a month ago, people probably can't remember what exactly the narrative was.

Tim Cynova

Yeah, I actually have been doing this thing since COVID, where at the end of every day I just write. It actually started during COVID to just get thoughts out of my head when like my mind was just racing. Just like end of every day, just like brain dump thoughts onto a piece of paper into just like a notion doc and then just let it sit. And now I'm like, okay, now I'm done with the day. I can like go to sleep or whatever.

And it's really interesting looking back at these things. So I've been doing it every day for 3 and a half, 3 years now. Damn. Yeah. And it's like usually 1 sentence, like today suck, This happened.

They're like, today was great. Like you recorded a good podcast. Like hire this new person. Ripple K. Ripple K.

And yeah, like today, I don't know. They're like Ripple K's bullish, fun day or something. But it's really interesting. Yeah, even like a month ago, it was like, damn, like things are a grind. Like just kind of like bearish sentiment, you know?

I mean, people can't remember how max bearish it was near the bottom. They can't remember what the sentiment was a month ago. They don't remember last cycle, what happened. There is this thing, I forget, it's 1 of Edward Chancellor's books, the guy who wrote Devil Take the Hindmost, but he's like, history is usually a guiding post for every single discipline except for finance. Finance is like, you have a year of memory total, which is which is interesting.

Well, it is playing. I'm speaking up. Yeah, speaking of a year. Yeah. Do you know what happened exactly a year ago Celsius to put up bankruptcy?

Wow.

I was going to say this is around

the terror blowing up too, probably a month after, no longer, say 2022. That was May 8th or 9th of 2022. And then you had June 13th-ish as when everybody was just market selling all the different assets. And that month up until July 13th, and today is July 13th, that was the extent of the like max bearish, max pain. Everything's going to get sold off or didn't get liquidated, tracking everything on chain.

And then when Celsius declared bankruptcy, that's kind of when everything was over to a large extent. Obviously you had the FTF stuff, which happened later in the fall, but there was like a month period. And this was sort of like the marking of the end of that crazy period. So I was thinking about that before we started recording today.

If you look at it, like most of crypto, well I guess Bitcoin did make a fresh bottom, but ETH bottomed in June, I believe, Or maybe it was July. It was around, it was June 13th. Right. What did it bottom out?

900? 900, 888.

Of course it was like a meme number because we just roll like that. But then you look at all the other technology stocks and they bottomed in the fall. And it is this kind of like, you know, first in first out or like, you know, crypto definitely leads a lot of these moves and it's been lagging recently, but compared to stocks, but it will be interesting to see for the rest of the year. Tom Lee, I don't know

if you know who Tom Lee is, Yano? The Buttstrat guy?

Yeah, Buttstrat guy. Oh yeah.

Michael and I have subscribed to him for probably at least 4 or 5 years at this point. And a lot of his calls, really optimistic, really bullish, but mostly contrarian. And whenever he goes on CNBC, they just take him to the woodshed. Especially when he's wrong, just rip him apart. But he's generally always bullish.

He's just an eternal optimist. He is. And he seems

like a really nice guy too.

I met him back in 2018 at Pomp's office and he's

just a good guy. Like he doesn't really kind of play around the crypto hoop until like the bottom of the bear market. And then he's like the only guy who's like still bullish. But he really did call this market over the past year just to the extent that no 1 else has. Being opportunistic pays off.

It does pay off.

Coinbase is up like 150% I think on the year it is 80% this month or 50% this I haven't looked at this stock in the last day or 2 but I think it's been ripping. Anyways, Coinbase announced 2 big things this week. 1 was, BASE is open for biz. So I think BASE mainnet just opened to users today or yesterday. And then they also announced wallet-to-wallet messaging this week, which is, whether or not it's a big use case, I have no idea.

But I just think it's cool to see people pushing the innovation on the wallet side. So if people miss this, basically Coinbase wallet launched built-in messaging, which is powered by the XMTP protocol. It is end-to-end encrypted, private, portable. You can see them kind of trying to compete with someone like a signal maybe on a, in how they message this thing, but it allows you to connect directly through your wallet, engage with both B2C and kind of B2, right? Like C2C, like consumer to consumer, I can message you Vance and Michael.

And then we can also, we were pretty excited about this at Blockworks because we can message our community essentially on chain. So for example, like at the here's a real use case is we we sold these permies, right? And permies get you access have a bunch of utility they get you like if you're a permie holder, you get access to blockworks research for free you get a lifetime past Permissionless there's like a private channel like all this cool stuff and permit community super strong It's there's no way for us to message them like when you let the UN bought a permit today there's no way for me to go message you, Michael, and tell you what we need to tell you. Like, hey, by the way, you get a free pass to permissionless. It's in September.

We have to basically rely on you following us on Twitter and then using the tweet and then jumping in the discord. Right. So now for the first time ever we can message all Fermi holders and be like hey by the way if you haven't got your permission list ticket and then they can respond to us very very cool. So it's a good way for these on chain protocols and companies to engage with their communities.

I mean at the same time you have Google Play announcing a reversal of their previous opinion of not allowing NFTs in app to be bought, sold, used as basically for the exact same purpose that you're talking about. So Google Play Store, Android phones will allow apps with NFTs going forward. I think that there's going to be a large scale recognition that NFTs are going to eventually become not just an asset with financial value and interest in that respect, but it's also going to be something that has consumer appeal for use cases outside of the financial ones.

Yeah. Look at the Google product manager. His quote was, from re-imagining traditional games with user-owned content to boosting user loyalty through unique NFT rewards, We're excited to see creative in-app experiences flourish and help developers expand their business.

Cheers. Age. I mean, even messaging and the interplay between games is super interesting. If you can really get the social network going on chain and then you get an ad network, like you can build it up pretty quickly into a very real, probably not quite as like degenerate ecosystem.

Yeah, I think they launched an ad network, I have a feeling Coinbase will launch an ad network.

There's a few people trying to build ad networks. It's, that's another. Antonio. Yeah, there's a lot of interesting efforts on that space.

Yeah. What else are you guys looking at? What else happened this week?

Oh, Richie, the. Richie Torres. Torres, yeah, shout out Richie Torres. So this, uh, Richie Torres is, um, congressman for NY 15 in the Bronx. Uh, he, he tweeted out about an hour or 2 ago.

He said, uh, Gary Gensler is acting like an overzealous traffic cop, arbitrarily ticketing drivers while keeping the speed limit a secret. Great analogy actually. It prefers to communicate, he prefers to communicate by enforcement rather than by rules or guidance, but that's no way to regulate crypto. I'm calling for an investigation. Man what a what a big, which is big because this is a, if you look at the people who have called out Gensler in the past, it's primarily Republicans.

Right. And this is kind of the Dems starting to turn on Gensler as well.

It's, I mean, it's kind of hard to imagine that FTF was what, like 9 months ago? Yeah. I would have thought this arc would have taken a lot longer, because we've gone through it happening, everybody being in trouble, enforcement actions, lawsuits, cases, And now it's kind of like the pushback is a little bit there on the SEC and people are more seeing it our way. It's just quick, honestly, in my opinion. I thought it would have taken longer.

Yeah. I have no idea what an investigation into the SEC actually means or what the process is, but just the narrative, um, I think is really positive.

Yeah. A lot of these things are like also political statements. Exactly. Like when Warren Davidson said he was going to fire, you know, Gary Gensler, you know, it's just not going to happen.

Yeah. Agreed. What else is going on?

How are things at framework?

Things are good. Um, just kind of getting back from, from break for the most part, Michael's on, on, on his, uh, his week off. We tend to switch off just in case, you know, it goes wrong.

You each take every other week off, right? Yeah. Yeah.

Yeah. Consistently.

Summers. Yeah. Um, what else? Honestly, just, uh, investing, but the bar is high. I think that's kind of the theme with everyone that we talk to.

And there's a few different verticals that you can pick. It's not like 1 thing anymore, which is nice. It feels like more dispersed than when everyone was just trying to

do DeFi. With any venture investment, and this kind of goes back to what we were talking about with the delineation that the judge made in the ripple case. It depends on your jurisdiction and it depends on the legal perspectives of that jurisdiction, but just about in any venture deal, you're selling equity and tokens. And so it doesn't really matter which side you are on when it comes to the investment itself. But yeah, if you're doing a private deal, it's going to have both features included.

Just because over the long arc of things, I think a lot of companies that don't expect to have a token will probably have a token. And many of these companies start off as labs organizations, but ultimately launch an infrastructure based L2 or something like that where a token is necessary. So I think a lot of the convergence will happen over time, especially with venture deals.

What about Arkham? Oh God, that's

a big deal. I don't know. What are they doing? Actually kind of like dox people on Jane?

Did they do the token sale because they failed a fundraiser? What happened here?

There was a lot going on. I don't know what happened with the fundraise.

It's funny, people love Arkham's product. I feel like it was starting to compete with Nansen and then they just blew it. I mean, Mike and I were talking about this, the number of companies that just self-sabotage themselves. I'm like, what are you doing Gary? Yeah.

And the self-sabotage in crypto is remarkable.

The bear market tends to bring that out in people.

I think there's just a, yeah. I mean,

Just some bad operators. Or the bull market decisions kind of come home to roost. That's the other flavor.

I'd like to hear that again.

The bull market decisions come home to roost. Oh, yeah. Oh, yeah. We did this thing 2 years ago. It's like, oh, no.

I mean, I tweeted this a while ago, but I think just about every startup that dies is not killed by homicide, but actually suicide. Quietly, I feel

like a lot of small seed companies, like sub 10 person companies have just kind of been closing their doors. Some are returning capital. Have we seen the end of that or Does that keep going basically for the rest of this year? I would assume it keeps going.

It keeps going. It definitely keeps going. I would imagine that this fall it gets even more dire just because you have a lot of the people that raised for 18, 24 months during 2021, they're out of capital by the end of 2023. And they probably have done things to sustain or prolong what ultimately will be the inevitable, which is a massive write down in terms of what the valuation is based on last round, needing to raise capital to survive, or frankly, just to wind down. We've seen a couple of companies who were raising, and then they came back to the table and said, actually, we're just not going to raise, shut things down, which is the first time that I've really seen that.

I think it comes from a recognition of like the market has completely changed, the outcomes have potentially completely changed as well. And people just get burned by the bear market and their heart's not in it. And frankly, entrepreneurship is not something where If you're not 110% in, you can't do it. So I think a lot of people are realizing that. Yeah.

Yeah. A lot of the more, I would say consumer crypto startups are having some trouble. Probably the NFT ones, that market has changed a lot. But If people want to continue on, they can generally raise money at a down round, fire sale, whatever valuation, it just gets back to Michael's point, like how bad do you want it? Is that worth it to you versus going off and doing something else with the next couple of years?

Weeks like this made me think we're going to have a fun time

in the next few years, but

not everybody gets on the board. Yeah.

The pivot to AI is dead, so I'm stoked you're up

there.

Yeah. I saw a tweet today that was like, is chat GPT the MySpace of AI? Maybe not, but it

kind of does get you thinking. Chat GPT month over month is down like 10%. Like the chart on interest like for Google Trends of ChatGPT is not looking positive.

Do you guys use ChatGPT?

Probably once a week. Yeah. Like, if I want to find out like some random kind of like permutation of like a Wikipedia fact. You know it's pretty good for that. But like I don't know what I'm like yeah I don't fully get it.

I use it. I use it a lot. What do you use it for? Basically, like getting off 0 with a Google Doc. So like, here's an example.

We just brought on a VP of sales and we create 30, 60, 90 day plans for everyone who joins Blockworks, especially like execs or leadership team. And I don't know, we've never had a VP of sales, right? And so I just, I was like sitting at this Google doc being like, all right, let's discuss 30, 60, 90. And I just went to GBT and was like, all right, here's some context. We're like a 50 plus person media company in crypto.

Here's our revenue. Here's how big the sales team is. We got this VP of sales. Here's where he's coming from. Create a 30, 60, 90 day plan.

I mean, like 70% of the way it spit out like a summary. And I was like, make this into 2 pages worth of stuff. Gave me super detailed analysis. I was like, break it down week by week. And then I copied that into a Google Doc and chopped it around.

And then added my own flavor, obviously.

Can you add in word context for me, for at least what we do.

I don't think what you guys do is as useful. I mean, we've like played around with like, you can actually like connect, not GBT, but there's some open source LLMs now. Like we've debated basically connecting like a couple of the open source LLMs to our governance platform. Maybe I shouldn't share this, whatever, I'll share it. And like, it might leak some product alpha, that's okay though.

I don't think other teams know how to build it. And basically making it so that you can update the governance proposals in real time as they come in, you can summarize them using like an open source LLM. Give kind of like that. Yeah.

To me, that's like not me using AI. That's like you using AI for me. I'm down for that though. That sounds great.

Yeah.

We're subs. We subbed to Blockhurst Research.

Vance, you tried like 7 times to subscribe to it. I kept getting failed notifications.

I'm the nightmare user that reads

all your stuff.

Yeah. That. Alright, should we wrap it?